PayPal Adds Gas Stations, Grocery Stores in Retail Push

PayPal unveiled new deals
with a chain of gas stations and a grocery store operator on
Monday, as the payments division of eBay Inc tries to
expand its service further into physical retail locations.

PayPal unveiled new deals
with a chain of gas stations and a grocery store operator on
Monday, as the payments division of eBay Inc tries to
expand its service further into physical retail locations.

PayPal said it signed payment deals with Mapco Express, a
unit of Delek US Holdings which runs more than 440 retail
fuel and convenience stores, and Spartan Stores, which
distributes groceries to more than 400 locations, including 97
of its own stores.

That helped bring the number of PayPal physical, or
brick-and-mortar, retail partners to 23, including Abercrombie &
Fitch, Home Depot and J.C. Penney.

PayPal, a leading online payments network, is trying to
expand into the physical retail world, a much larger market. Gas
stations and grocery stores are important partners for PayPal
because consumers visit these types of retailers much more
regularly.

"If they can penetrate those (categories) they can reach a
significant majority of the U.S. population on a regular basis,"
said Sanjay Sakhrani, an analyst at Keefe, Bruyette & Woods.

PayPal is also working on agreements with drugstore chains,
according to Don Kingsborough, the PayPal executive overseeing
the physical retail push. He declined to identify which
drugstores may be involved.

"You're not going to change where you get your prescriptions
or get groceries or gas, so PayPal has to be accepted everywhere
you shop," he said.

The partnership with Mapco uses QR codes, a type of barcode,
on their gas pumps that are scanned using a smartphone.

The user selects with the smartphone how much gas they want
to buy. Any loyalty card discounts show up automatically as the
gas is pumped.

A loyalty program offering 30 cents a gallon off for gas
would show up on the pump as $2.90 a gallon instead of $3.20,
for instance. The payment is completed through PayPal on the
smartphone.

Kingsborough said PayPal will have other partnerships with
"major petroleum companies," but declined to identify specific
companies.